At hedge funds, and to a lesser degree at big banks, high stakes trading rewards the most brazen, sometimes reckless, risk takers in the pursuit of big money. Yet when something goes terribly wrong, the boss who sought and promoted aggressive talent often walks away from allegations or charges of fraud, even when warning sirens were blaring or when they provided motivation for malfeasance.

“I think that as you go up the ladder, there is a sense of deniability that makes it hard for authorities to definitively determine a link. In some cases, they really may not know. Whether that’s negligent is a different issue but it’s probably not criminal,” a New York-based recruiter for hedge funds and investment banks said, asking to remain anonymous.

When Greenwich, Connecticut-based hedge fund Amaranth Advisors imploded in September 2006 after losing more than $6 billion in the natural-gas futures market, the blame fell on one man, “red-hot” star trader Brian Hunter. The sought-after trader was reportedly offered a $1 million bonus to join SAC Capital Partners in In April 2005. Amaranth founder Nicholas Maounis didn’t want to lose a celebrity, so he promoted Hunter to co-head of the energy desk and gave him control of his own book. Hunter was accused of conspiring to manipulate natural gas prices, something he only could have done with freedom Maounis had granted him.

SAC founder Steven A. Cohen, who had tried to lure Hunter from Amaranth to to his Stamford, Connecticut, fund is now defending his firm against allegations of insider trading in an alleged 1999-2010 scheme that involved stock in at least 20 companies and profits totaling hundreds of millions of dollars. Describing SAC as “a veritable magnet of market cheaters,” federal prosecutors couldn’t muster sufficient direct evidence against Cohen and instead charged his firm.

The SEC has civilly charged SAC’s Cohen with overlooking signs of unlawful insider trading, but it’s unlikely he’ll take the bullet. The layer of insulation that protects a boss like Maounis from the actions of their reports will likely allow Cohen to fight through this and get on with running his extensive family office.

“He can keep this tied up in the courts for years because he is a billionaire,” says Roy L. Cohen, a career coach and author of “The Wall Street Professional’s Survival Guide” and no relation to the hedge fund boss. “He’s also eliminating institutional capital. That’s one step to remove transparency. It’s easier to go after the smaller folks because they do not have as much at their disposal and their companies are willing to give them up. If you work for Steve Cohen, you have to know you are disposable and he is not going to protect you.”

With big banks, there is tremendous pressure to keep the bosses clean in a scandal to protect the firm’s reputation.

Jonathan Egol and Fabrice Tourre were a tight team on Wall Street, working side-by-side on a Goldman Sachs mortgage desk ahead of the financial crisis. But Egol made every effort to distance himself from his former underling, Tourre, while testifying as a Goldman witness at Tourre’s trial. Now, Egol is a Goldman Sachs managing director, while Tourre awaits sentencing following his Aug. 1 conviction on six counts of securities fraud — including “aiding and abetting” the bank itself.

Public companies like Goldman “tend not feel comfortable when their leadership is prosecuted so the company keeps it at as low level as possible,” says Cohen, the career coach.

J.P. Morgan trader Bruno Iksil, “the London Whale,” dodged charges only because he is cooperating with federal prosecutors. Javier Martin-Artajo and Julien Grout, who supervised the traders at the center of the debacle that cost J.P. Morgan more than $6.2 billion, have been accused of falsely hiding losses and causing the largest U.S. bank to report false financial data to the markets in the first quarter of 2012, but complaints do not name their former bosses. Filings refer to Ina Drew, the bank’s former chief investment officer, and Achilles Macris, a former top Chief Investment Office executive, only by their titles. Federal prosecutors say the pair put pressure on their subordinates to deal with the enormous risk being taken on in the portfolio of derivatives trades that led to the losses.

It’s highly unlikely that the Securities and Exchange Commission will find sufficient evidence that Drew and Macris ignored red flags of the attempts to hide the losses, and will instead just slap J.P. Morgan’s shareholders with a hefty fine while allowing the bank to settle without admitting anything untoward.

Big fish may swim free and big firms rarely have to admit any wrongdoing, while little fish flounder in the turgid waters of justice.